Startup Horror Stories
There were no tricks, only treats for founders at this special Halloween event co-hosted by Spice Startups and SeedLegal...
EmpowerRD provides an alternative to expensive accountants / advisors for start ups and scale ups, to allow them to retain significantly more of their taxpayer funded R&D tax credit and file in a fraction of the time.
We utilise clever technology and domain expertise to help our users submit R&D claims in a more cost-effective way (we take 5% commission instead of 20-25%). By opening up the R&D process and giving our clients expert guidance, we also enable them to submit claims faster (think hours instead of weeks).
We were founded on the principle that support for creating R&D claims, which need to be filed to apply for the R&D credits, should be easily procured and cost-effective. UK businesses should be empowered to take control of the process. We are driven to allow deserving companies to claim and keep more of their credit so they can better innovate, hire and grow.
I started EmpowerRD after an established career working in management consultancy and tax for one of the UK’s ‘Big 4’ accounting firms. Sitting on HMRC’s R&D Consultative Committee, I realised that for startups / scale-ups the process for creating R&D claims could be convoluted, expensive and ultimately structured to the advantage of the advisor. Compounding this, many advisors demonstrated a limited interest in making the process more efficient (at least for claimants) or more transparent. I saw there was a better way and set out to democratise the process on behalf of UK start-up and scale-up businesses.
As with much in life, it was serendipity. A friend had previously pitched to Forward Partners and suggested they might be a good fit given ability to quickly deploy a day-one technical team (product, full-stack dev, UX, branding specialists etc) to help prove the assumptions around the business. Not having had much experience of VCs I decided to go in a test my business with them at one of their 15 minute office hour surgeries and the rest is history.
I’m pretty confident that the VC invested in the idea and the founder (i.e. me). Having been a national lead in the Government Incentives space with the Big 4 for many years, I was able to demonstrate an understanding of the domain and market dynamics, which I’m sure played a key role in the decision making process. At an early stage of your business there’s not much in the way of empirically-tested product, but I had a working prototype that helped convey the ‘art of the possible’. Forward wanted to be sure that the idea could fly and that I was the right person to pilot it so we tested it in some real world scenarios, which was a great experience.
Unless you have a year or two’s worth of revenue numbers and customer traction, don’t stress too much on the projections. They’re definitely wrong and could work against you, indicating naivety or worse. In general, focus on backing up your statements with as much factual data as possible (real world, preferably from a trusted source).
– Budget for what you need then add 3-6 months worth to determine how much you need to raise
– Dont ‘spray and pray’. Reach out to only those VCs / Angels that have a demonstrable interest of investing in your domain
– Keep your head up and believe in yourself!
We’ve proved the end-to-end model works. We’re receiving wonderful feedback from the companies we’re working with, who are helpfully evangelising on our behalf. But word-of-mouth, although the most effective channel, is not the only one. We’re now gearing up to kick off some broader marketing to let companies outside of our tech-bubble know that there’s a better way of filing for government R&D credits.